- Tesla shares fell on Monday after an analyst lowered its target price in stocks in a report that followed a session of strong sales on Friday.
- The Wedbush analyst pointed out a lot of concerns about the electric car maker, including an email that CEO Elon Musk sent to employees last week and details the cost reduction measures.
- Investors abandoned the stock last week after the National Transportation Safety Board said Tesla's autopilot function was activated during a fatal crash that involved a Model 3 in March.
- See the Tesla trade live.
Tesla shares fell on Monday after an analyst reduced his target price in a heartbreaking report, based on a series of problems facing the electric car maker.
"We continue to have great concerns about the trajectory of Tesla's growth prospects and the underlying demand on Model 3 in the United States in the coming quarters," Wedbush analyst Dan Ives said in a note to clients on Sunday. night.
He added that with a "red-code situation at Tesla, Musk & Co. is expanding to insurance, robotaxis and other projects / science fiction efforts, when the company should focus laser to shore up the core demand of Model 3 and simplify its Business model and expense structure.
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Tesla's stock fell as much as 7.5% on Monday to its lowest level since December 2016. Ives lowered its target to $ 230 from $ 275 per share, which means it is still betting on a 17% rally from here. Less than a month ago, he had a target price of $ 365, which makes him one of Wall Street's most optimistic analysts.
He and a group of other Wall Street analysts have drastically moderated their view of stocks in recent months, as growth, profitability and demand concerns have had a great weight on Tesla.
Read more: The Tesla analyst cuts his goal again and says that everything you think you know about him is in question.
Although Ives saw the capital increase announced by Tesla earlier this month as a "smart strategic breakthrough", it is increasingly concerned about the company's "cash crisis" as it builds its Shanghai factory and attempts to increase the company's production. Model 3
And the revelation that Musk is urging employees to be aware of costs with their company's expenses, by an internal email leaked to the media and confirmed by Business Insider, is not exactly inspiring confidence, Ives said. .
Read more: Elon Musk says in an email to employees that the new cost reduction measures are "the only way for Tesla to become financially sustainable"
He added that the company has "continuing concerns about Tesla's ability to balance this 'perfect storm' of lower demand and profitability concerns that will weigh on the stock until Musk & Co. demonstrates otherwise in terms of delivering solid results in the coming quarters. "
The report followed a session of strong sales on Friday.
Tesla shares closed the day down 7.6% after the National Transportation Safety Board said in a preliminary report that Tesla's autopilot feature was activated during a fatal accident involving a Model 3 in March. .
The fall on Monday raised the 2019 losses of the share to 40%.